Application to Carry on Financial and/or Islamic Financial Advisory Frequently Asked Questions (FAQs)

Introduction The FAQs are intended to provide clarification to applicants on the requirements to carry on financial and/or Islamic financial advisory business under the Act 2013/ Islamic Financial Services Act 2013 (the Act), including the standards and guidelines applicable for the conduct of such business. The FAQs will be updated from time to time.

No. Questions Answers

1. How and when can (i) For new approval an application be submitted to  A new applicant is required to complete and submit the application Negara Malaysia form available in the Bank’s website and submit all supporting (the Bank) to carry documents (listed in the checklist of the application form on financial and/or CMC/NEWFA/2020) either in the months of February or August Islamic financial annually. advisory business  Any application received in any other month will be processed in the under the Act? next processing period (for e.g. an application received in the month of March 2020 will be processed in August 2020 while an application received in October 2020 will be processed in February 2021). (ii) For renewal of approval  Existing approved financial advisers and/or Islamic financial advisers are required to complete and submit the application form available in the Bank’s website and submit all supporting documents (listed in the checklist of application form CMC/RENEWFA/2020), two (2) months prior to expiry of approval period. Note: Applications which are incomplete and without the required documentation/information will be rejected.

2. Are there any fee  The Bank does not charge any fees for processing the application. incurred to apply to  However, annual fees of RM500 and RM150 will be imposed to carry carry on approved on financial and Islamic financial advisory , respectively. financial advisory business?  It would usually take 30 working days from the date the Bank receives How long will it 3. the application form and complete documentation/ take for my information. application to be approved?  Applications which are incomplete and without the required documentation/information will be rejected.

4. Can the application Currently, the Bank only accepts hardcopy submissions addressed to: form and Director supporting Consumer and Market Conduct Department documents be Central Bank of Malaysia submitted Jalan Dato’ Onn online/via email? 50480 Kuala Lumpur

5. How long is the  For new approval, the Bank will usually grant approval for a one year approval period period. granted to carry on  Thereafter, the Bank may grant a longer or shorter approval period financial advisory based on the company’s profitability, financial strength, business business? growth, robustness of internal procedures, compliance with regulatory requirements, etc. No. Questions Answers

6. What are the Applicants must meet the following requirements: minimum (i) A Body Corporate requirements to Applicant is a company incorporated under the Companies Act 1965 carry on financial or Companies Act 2016 and/or Islamic financial advisory (ii) Minimum Capital Funds business under the Must have minimum capital funds unimpaired by losses of Act? RM50,000 (iii) Professional Indemnity (PI) Must have PI coverage of at least RM200,000 net of deductibles upon approval

(iv) ’s Representative (FAR)  At least one of its directors shall be an FAR/Islamic FAR  Applicant who wishes to carry on Islamic financial advisory business must engage at least one Islamic FAR

7. What are the other (i) For director, CEO and FAR requirements for a  Must satisfy the ‘fit and proper’ criteria as specified in the policy director, chief document on Fit and Proper Criteria for Approved Persons executive officer  Must not be a tied agent or employed by any insurer or takaful (CEO) and FAR? operator

(ii) For CEO  CEO should have the related qualification and experience in the financial  CEO must be employed on a full-time basis and reside in Malaysia. (A CEO currently employed by another company must provide a 'Letter of Undertaking' that he/she will resign, upon approval of the application)

(iii) For FAR  The FAR must possess the minimum qualification of either:  Registered (RFP);  Certified Financial Planner (CFP);  Chartered Financial Consultant (CHFC);  Shariah RFP; and/or Islamic Financial Planner (IFP) [for Islamic FAR]  The FAR without any of the above qualifications must pass at least three (3) modules that covers key knowledge areas as follows:  foundation in financial planning;  risk management;  insurance planning; and  planning  The FAR must be engaged on a full-time basis (an FAR currently engaged/employed by another company must provide a ‘Letter of Undertaking’ that he/she will resign upon approval of the application).

8. Can a Shariah No, a Shariah qualified Islamic FAR cannot advise on insurance products qualified Islamic unless the Islamic FAR obtains the minimum requisite qualification to be FAR also act as an a FAR. The same applies to a FAR who wants to advise on takaful FAR for insurance products. products?

No. Questions Answers

9. If the applicant is  For a new application to carry on financial advisory business, the Bank currently involved will also consider a company which is already carrying on activities in other types of related to financial activities. businesses, is it  In addition, once approval is granted, an approved financial adviser is allowed to use the required to seek the Bank’s prior approval to carry on any other same company to business or activity not connected with its approved business. apply to carry on financial advisory business?

10. What are the other The approved financial advisers and/or Islamic financial advisers, among requirements to be others, should observe the following requirements: fulfilled upon  Must offer insurance/takaful products from more than one insurer or approval of my takaful operator application?  Must commence financial advisory business within six (6) months from the date of approval  Must be a member of the Ombudsman for Financial Services  Encouraged to be a member of the Association of Financial Advisers  Must have an established place of business/office  Must submit semi and annual returns, and annual audited financial statements to the Bank

11. Who can we You may contact any of the following officers via our general line at contact should we +60326988044: have any further (i) Roselina (ext. 8050/[email protected]) queries regarding (ii) Sumathi (ext. 8829/[email protected])

our application?